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RBS Morgans says these 4 stocks will outperform

Australia’s largest full service stockbroking firm, RBS Morgans (RBSM), recently held its 23rd Annual Queensland Conference. The conference featured 36 companies, and afterward RBSM announced its top 5 stock picks from the 36 companies that presented. The first four were rated “outperform”.

1. Suncorp Group (ASX: SUN). The bank and insurance firm has a stronghold in Queensland, which makes it well positioned to benefit from an improving property sector. The shares are currently trading at $13.18 and RBSM has a share price target of $13.52.

2. Domino’s Pizza Enterprises (ASX: DMP). The franchisor has been on a strong growth trajectory as it has expanded its operations into Europe and now Japan. The shares are trading at $14.35 and RBSM has a share price target of $13.15.

3. Ardent Leisure (ASX: AAD). With entertainment operations in Australia, New Zealand and the USA and boasting a high dividend yield, the stock is garnering the attention of investors. The shares are trading at $1.92 and RBSM has a share price target of $2 for the stock.

4. Freedom Foods (ASX: FNP).  The specialty food manufacturer’s share price has rocketed 394% in the past year, and is currently trading at $3.31. RBSM has a share price target of $2.92 on the stock.

5. GWA Group (ASX: GWA) is rated as neutral by RBSM, but it did round out the Top 5 picks. The diversified group offers investors exposure to a range of building related products, which is appealing given the outlook for the home building and property sectors. The shares are currently trading at $3.20 and RBSM has a share price target of $3.03.

Foolish takeaway

Buying quality stocks at reasonable valuations over the long-term has proven a successful strategy for many investors. The above stocks all have a number of positive attributes that make them good candidates for an investor’s watchlist.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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